Yates in talks over takeover offer
Shares in Yates Group soared today (June 8) after it emerged that it was in talks to sell the business.
Chairman Peter Dickson admitted that the pub operator was in "preliminary discussions" but did not reveal the potential buyer's identity.
The news drove the share price up by over 22 per cent from 179.5p to 219.5p by the time the markets closed this afternoon, a marked improvement from its six-year low in January of 127p.
It is understood that Yates' directors have been looking at taking the business private because of their frustration about the depressed share price.
However, it has also been vulnerable to a takeover bid since November when it reported an 18 per cent fall in half-year profits from £7.1m to £6m.
Whitbread was seen as a possible contender before it sold its pubs to focus on restaurants, hotels and health clubs, but national operators such as Luminar, the Old Monk Company, SFI Group, Mill House Inns, Noble House Leisure, Barracuda Group and Regent Inns remain on the lookout for deals. None has admitted to having an interest in Yates.
Last September, Yates revealed that some of its new outlets were not as successful as it had hoped, which would hit profits for the year.
The Bolton-based company, which dates back to 1884, has been updating its national chain of 113 Wine Lodges to give the pubs a more café-bar feel. Its latest opening was a flagship bar in London's Leicester Square.
The company has also been rolling out its successful chain of outlets branded as Ha! Ha! Bar & Canteen, which is now in 12 sites, and converting its student-oriented Blob Shops to Addisons.
In November, Yates sold its eight-strong group of traditional pubs under the Watling Street Inns banner to Nottinghamshire brewer Hardys & Hansons.
Earlier this year, it sold its wholesale freetrade business to Manchester brewer JW Lees and, last month, went on to sell its two wholesale depots in Llanelli and Cardiff to a management buyout team for £1.99m. Related stories:
Hardys heads northwards (December 4, 2000)
